As we slide into the last few days before Labor Day, trading volume should continue to fade as many traders will give summer an extended goodbye from the beach rather than the office.
However, for better or worse, and usually worse, nothing seems to keep Federal Reserve Regional Presidents off the rubber chicken circuit. Neel Kashkari is giving a speech right now, while Charles Evans threatens to disrupt the status quo at 3:30 this afternoon. Two other Fed heads spoke in China last night. One suggested that low rates will be here for a long while. The other suggested it was time to hike rates. Go figure.
Bob Evans reported better than expected results. Palo Alto Networks and H&R Block are both out with disappointing reports.
The ADP Employment Report, a survey of their 400,000 business clients comes in 5 minutes and is expected to estimate that 175,000 new jobs were born in August. The Chicago PMI Report arrives at 9:45.
Overseas markets are mixed.
As we wait for stock prices to get out of bed, our stock futures have once again hit the snooze button. Adjusted for fair value, the S&P 500 futures are higher by a fraction of a point, the Dow futures are down about 9 points, and the NASDAQ futures are just about a point below fair value.August 30, 2016
There’s bad news today if you’ve been dreaming of an Oreo cookie with a Hershey’s chocolate filling. Hershey’s was apparently a little too rich for Mondelez’ tastes and they have backed off their takeover bid. As a result, Hershey’s stock is on a bit of a diet this morning, shedding about 11 percent. Mondelez shares are on a little sugar high, up 3 percent.
Speaking of shedding about 11 percent, Hershey’s isn’t alone. Abercrombie and Fitch reported a loss of 19 cents per share this morning. Comparable store sales were down 4 percent and the forecast was absolutely awful and that has Abercrombie shares on the discount rack.
While everyone awaits the iphone 7 reveal next Wednesday, the European Union had a little revelation of their own this morning. They have ruled that Apple must repay about 14½ billion in illegal tax benefits granted by the country of Ireland. Yes, Apple has more than 200 billion of cash on hand, but they will be appealing that ruling and the final number may wind up being considerably less.
The Conference Board’s August Consumer Confidence survey results come at 10. Expect no change from July’s 97.3.
Most overseas markets are a little higher. Our stock prices are going nowhere fast. Adjusted for fair value, the S&P 500 futures are higher by a fraction of a point, the Dow futures are up about 11 points, and the NASDAQ futures, hit by the Apple tax news, are about 6 points below fair value.
All the Fed-speak on Friday sent stock prices on a wild ride, first sharply higher, then lower again. The problem appears to be that the machines that drive stock prices nowadays are programmed with artificial intelligence. Those machines keep searching in vain to detect some sort of intelligence, or at least consistency, in Federal Reserve speeches. Good luck with that one.
At 8:30 this morning, we’ll find out how much Americans made and spent in the month of July. It’s expected that personal income rose four-tenths of a percent, and that spending rose only three-tenths of a percent. Think about that. Americans spending less than they earn? If that happened, it should make headlines.
The epipen debacle continues over at Mylan. They have now announced that they will bring to market a generic epipen in a few weeks for the “bargain basement” price of $300 per two –pack. By the way, word is that Mylan’s CEO Heather Bresch, who reportedly earned about 18 million dollars last year, sold 100,000 of her Mylan shares shortly before the epipen price increase was announced.
The Japanese yen weakened overnight, and that led to a 2.3 percent rise in the Nikkei average today. However, the vast majority of other foreign markets are a little bit lower. Our futures have been a little higher for the past couple of hours. Adjusted for fair value, the S&P 500 futures are higher by about 2½ points, the Dow futures are up about 8, and the NASDAQ futures are about 2 points above fair value.
Things were muddling along yesterday until Hillary Clinton’s critical tweet about Mylan Labs’ Epipen pricing sent pharmaceutical, biotech , healthcare and the general market lower. We should start the day with minor losses today as Mylan fights back with their explanations and justification for the big Epipen price increase. Mylan shares are actually more than 3 percent higher pre-market.
While that political battle plays out, a couple more retailers are out with results. Tiffany reported better than expected earnings but worse than expected sales on an 8 percent drop in worldwide composite revenues. Dollar General missed the 73 cent profit estimate by a penny per share.
In a land where profits appear to have been replaced by store closings, Sears lost another $3.70 per share last quarter, with Kmart comps down 3.3 percent and Sears sales down 7 percent. Store count is down to about 1,600 from about 3,700 a few years back.
The July Durable Goods Report comes at 8:30. Expect a 3.7 percent pick up after a 4 percent drop in June. Fed Regional President Esther George said this morning that it’s time for an interest rate increase, but we’ll find out what the boss says tomorrow when Janet Yellen speaks.
Most overseas markets are lower. Adjusted for fair value, the S&P 500 futures are lower by about 2 points, the Dow futures are down 18, and the NASDAQ futures are about 6 points below fair value.
A lot of people are soaking in swimming pools this week as they enjoy the last few days of summer vacation. Likewise, stock prices are also likely to tread water until Friday. That’s when Janet Yellen gives us a little talking to direct from the big Federal Reserve Conference in Wyoming. Although the general consensus is that we’ll see a national election before we see a change in short term interest rates, any hint of a September hike in rates might send stock prices under water for a while.
Shares of Lazy Boy are heading for the deep end of the pool this morning. Sales slipped and Lazy Boy shares are off almost15 percent in the pre-market after last night’s disappointing earnings report. 28 cents of operating profit missed estimates by a penny on a surprising drop in sales.
Shares of Intuit are also looking for a life preserver pre-market. Adjusted earnings of 8 cents came in a dime better than expected, but a weak outlook from the Turbo-Tax maker has Intuit shares more than 5 percent lower this morning.
Oil is also lower by about 2 percent this morning.
The July Existing Home Sales Report comes at 10 this morning, but the potentially market moving economic stuff in packed into the last two trading days of this week.
Asian markets were narrowly mixed overnight, but Europe is a bit higher at this hour. Adjusted for fair value, the S&P 500 futures are higher by almost 2 points, the Dow futures are up 11, and the NASDAQ futures are about 4 points above fair value.
August 19, 2016
With major earnings announcements pretty much in the rear-view mirror, we can sum up the second quarter earnings reports as “Not great, but not as bad as expected.” But in the absence of really great news or really bad news, stock prices continue to wax and wane in direct response to the words of Federal Reserve Open Market Committee members.
This week, we’ve heard three Fed heads in a row all hint that they’d like to see another rate hike before the end of the year. The latest of those opinions came last night from the Dallas Fed head James Kaplan, and stock futures took quite a dive shortly after midnight as a result.
Back to those suddenly less-than-important earnings reports, better than expected results are out from Applied Materials, Foot Locker, Deere and Estee Lauder although Lauder stock is lower on guidance. GAP shares are gapping 5 percent lower on a drop in sales and pretty weak full year guidance.
Thankfully, there are no Federal Reserve speeches scheduled today. In fact, there’s really nothing of great import on the docket as far as economic reports are concerned.
European markets are down anywhere from one-half to two percent at this hour. Adjusted for fair value, the S&P 500 futures are lower by 8 points, the Dow futures are down 62, and the NASDAQ futures are about 15 points below fair value.
We have another little flurry of earnings reports to review this morning, and although all the biggies beat estimates, the news is not all positive. Let’s start with the best of the bunch. Victoria’s Secret parent company L Brands reported 70 cents in adjusted earnings. That was 11 cents better than expected. They also raised full-year guidance and L Brands shares are looking to open about 4 percent higher.
Walmart’s results should help and S&P and the Dow this morning. $1.07 of operating earnings was a nickel better than expected. Walmart shares are about 3 percent higher premarket. Hormel and Cisco Systems also beat expectations, but Cisco guided lower and will cut 7 percent of its workforce, which amounts to about 5,500 jobs.
Weekly Jobless Claims come at 8:30 and are expected to be little changed at about 265,000 claims. The Philly Fed Survey, the Leading Economic Indicators and another Federal Reserve head honcho’s speech are on the docket as well.
European markets are up just a bit this morning, but we’ll likely start the day bucking that trend. Adjusted for fair value, the S&P 500 futures are lower by almost 3 points, the Dow futures are down 21, and the NASDAQ futures are almost 10 points below fair value.
For the second time in a month, the Dow, S&P 500 and NASDAQ indexes all closed at all-time highs yesterday, although we could have a little give-back in the early going today.
One of the star stocks of the year had been Hain Celestial, up 32 percent. “Had been” is the important part of that sentence. Yesterday, Hain announced a delay in their quarterly earnings report due to questions about internal accounting controls. Questions about a company’s accounting usually result in a “sell first, ask questions later” response on Wall Street, and Hain Celestial shares are about 28 percent lower pre-market, after losing 3½ percent yesterday.
Home Depot matched the earnings estimate with its quarterly report and raised full year guidance a bit. Home Depot shares are marginally higher pre-market.
Comments from the San Francisco Fed head yesterday suggest that an increase in interest rates may be a long way off. That has the yen higher, and up to parity against the dollar, sending Japanese stocks lower. The Atlanta Fed President gives a speech at 12:30 this afternoon.
Europe is about a half percent lower. At this point our futures are almost the mirror image of where they stood 24 hours ago. Adjusted for fair value, the S&P 500 futures are lower by 4 points, the Dow futures are down 38, and the NASDAQ futures are almost 8 points below fair value.
August 15, 2016
We’ll once again start the new week at or above all-time highs on the major indexes. A couple of individual stocks closed out last week at all-time highs as well, on the heels of strong earnings reports. Chip-maker Nvidia rose about 6 percent after reporting 40 cents pf profit, three cents ahead of estimates. They also raised guidance. Not to be outdone, Planet Fitness shares rose 10 percent to a new all-time high.
Also up about 10 percent were shares of retailer Nordstrom.
On the famous other hand, we’ll be saying goodbye to a bunch of Ruby Tuesday restaurants. The shares lost 13 percent on Friday on an earnings miss and a decline in same store sales.
At 8:30 we’ll learn about manufacturing growth, or lack thereof in the New York Region. Then at 10, the National Association of Home Builders August Report is expected to perk up a bit to a reading of 60 from July’s 59.
A bunch of overseas markets are closed for a holiday today, but the European markets that are open are relatively unchanged.
We should start the morning on the upslope. Adjusted for fair value, the S&P 500 futures are higher by 3½ points, the Dow futures are up 34, and the NASDAQ futures are almost 10 points above fair value.
Remember the Y2K scare? Doesn’t it seem like Y2K was just a few months ago? It turns out that the Y2K kerfuffle was almost 16 years ago, December 31, 1999. That was also the last time that the S&P 500, the Dow Jones 30 Industrials and the NASDAQ 100 all finished at all-time highs. That is, of course, until yesterday. And while the futures aren’t up by much this morning, the market’s momentum is clearly to the upside.
Shares of Nordstrom are about 10 percent higher this morning after last night’s earnings report. 67 cents of quarterly profit was 11 cents better than expected.
Also with better than expected numbers was J.C. Penney. Penney checked in with a five cent per share loss, as opposed to the consensus view of a 15 cent loss. Penney stock is about 3 percent higher pre-market. Planet Fitness raised guidance and the shares are about a percent and a half higher.
Retail Sales and the Producer Price Index are on the way this morning. There were some disappointing Retail sales and Industrial Output numbers released in China overnight, but that didn’t stop Chinese stocks from rising a bit.
European markets are pointing a little lower, but our futures are just a bit above the flat line.
Adjusted for fair value, the S&P 500 futures are higher by a half point, the Dow futures are up 8, and the NASDAQ futures are almost 3 points above fair value.
August 11, 2016
Most retailers have a January 31styear end, which means that their second quarter earnings reports come a month after most companies and a bunch of retailers are out with good news this morning.
Kohl’s shares are about 9 percent higher after reporting $1.22 of profit. That is 19 cents more than expected. Macy’s shares are also about 9 percent higher pre-market. Macy’s announced 54 cents per share, which was 9 cents better than expected. Sales topped expectations and Macy’s announced that they will close 100 of their roughly 700 stores in early 2017 as bricks and mortar continue to give way to the internet. Speaking of internet retailing, Alibaba reported 74 cents in profit. That was 11 cents better than expected and Alibaba shares are about 4½ percent higher.
At 8:30 this morning, the Weekly Jobless Claims Report is expected to be pretty much unchanged at 265,000.
Once again this morning, overseas markets were little changed overnight, although most of the movement in Europe this morning is higher. Our futures have picked up some steam over the past couple of hours, and at this point it looks like we may well recover yesterday’s losses in the very early going today.
Adjusted for fair value, the S&P 500 futures are higher by about 6 points, the Dow futures are up 52, and the NASDAQ futures are a little more than 13 points above fair value.
As we enter the winter of second quarter earnings season, we have another example of some good earnings reports being overshadowed by a weaker outlook. That’s the case for Michael Kors today. Earnings and sales came in better than expected for the quarter gone by. However, Kors shares are about 4 percent lower on lower than expected same store sales, which is not exactly a sign of good things to come. Wendy’s and Disney also beat earnings estimates, although Disney is off 1½ percent and Wendy’s is 4 percent lower on a downbeat outlook.
Good things did not come from phase 3 testing of Eli Lilly’s hoped-for breast cancer drug. As a result, Lilly will renew testing in combination with other drugs, but in the meantime, traders are putting a 3 percent discount on Lilly shares this morning.
Mortgage applications jumped 7 percent last week, on a three percent increase in purchase applications and a 10 percent spike higher in refinancings.
The Labor Department’s latest color on the job market comes at 10 o’clock with the release of the latest JOLTS report. That stands for Job Openings and Labor Turnover.
Overseas markets were pretty flat overnight. Our futures bounced up from the flat line during the past hour or so, but not by much. At this point, adjusted for fair value, the S&P 500 futures are higher by about 2½ points, the Dow futures are up about 10, and the NASDAQ futures are a little more than 5 points above fair value.
The link-up between Walmart and Jet.com DID happen yesterday, and the price tag was even bigger than expected. Three billion in cash and 300 million worth of Walmart stock goes to two-year old Jet.com. So, in case you’ve been despairing that there’s just no way to get ahead in the next couple of years, pay attention here and let’s get productive.
After all is said and done, increasing labor productivity is what results in raising the population’s living standards. That’s why the last couple of quarterly reports on Labor Productivity have been cause for some concern. At 8:30, we’ll get the second quarter Labor Productivity and Unit Labor Cost data. Expect that productivity rose a half percent, as opposed to a more than half percent decline in the first quarter. Perhaps more importantly, Unit Labor Costs are expected to have risen just 1.8 percent, following up rather disturbing 4.5 percent and 5.4 percent increases the last two quarters.
Shares of Coach are 3½ percent lower after reporting earnings this morning. Norwegian Cruise Lines shares are about 7½ percent lower on weak guidance.
Asian markets were mixed overnight, but Europe is solidly higher, and we could be heading for new record highs. Adjusted for fair value, the S&P 500 futures are higher by about 2½ points, the Dow futures are up about 29, and the NASDAQ futures are 7 points above fair value.
We’ve had more than three quarters of the S&P 500 companies report second quarter earnings and so far, it looks like they’ve sandbagged estimates by about the same amount as usual. Two-thirds of the reporting companies beat estimates, which is pretty much the historic norm.
Perhaps the good news is that it looks like earnings only declined about 2 percent in the second quarter, which is an improvement from the 5 percent decline reported in the first quarter.
Today is likely the day we’ll hear that Walmart is buying Jet.com as they desperately try to catch up to Amazon in online sales. As big as Walmart is, Amazon has 7 dollars of online sales for every dollar brought in online by Walmart. The price tag for Jet.com is reportedly about 3 billion dollars. Jet.com has only existed for about two years.
Tyson Foods shares are almost 5 percent higher pre-market on raised earnings guidance. Mattress Firm is about 115 percent higher on a buyout offer from a South African firm.
The Labor Department’s July Labor Conditions report comes at 10 this morning. It’s a compilation of 19 different data points. The June report came in at a negative 1.9.
Japanese stocks rose almost 2 ½ percent overnight, leading all Asian markets higher. European markets are on the main a little higher.
August 5, 2016
Outside of a Federal Reserve interest rate announcement, no other economic report draws more interest nowadays than the Labor Department’s Monthly Employment Report and lo and behold, it’s the first Friday of the month once again.
In less than 20 minutes, expect to hear that 180,000 new non-farm jobs came into being in July, with the unemployment rate shrinking to 4.8 percent. The average hourly wage, a harbinger of future inflation, is likely to garner more attention in months to come. It is expected to have risen two-tenths of a percent, to an annualized 2.5 percent. Still tame, but worth watching.
There are an unusual number of big movers in the pre-market this morning. On the plus side, internet storage firm Rackspace shares are about 16 percent higher on word of a potential buyout. GoDaddy may not be using Danica Patrick in their ads anymore, but with a quarterly earnings report this good they may not need her. GoDaddy shares 24 percent higher pre-market. Priceline shares up 6 percent, and Kraft Heinz higher by 4 percent.
Weight Watchers shares are losing 7½ percent of their dollar weight on a decline in membership and internet security firm Fireye share are down 17 percent on lousy guidance.
Overseas markets are mainly higher. Our futures have lost a little steam, but at this point, as we await the Jobs Report, adjusted for fair value, the S&P 500 futures are higher by almost 4 points, the Dow futures are up about 22, and the NASDAQ futures are 13 points above fair value.
The stock market’s fear of Great Britain leaving the European Union was pretty short-lived. However, the Bank of England appears to prefer being safer than sorrier. This morning, the Bank of England cut interest rates for the first time since March, 2009 (remember that happy time?) They also promised some quantitative easing and said that more monetary stimulus was possible in the future.
That news put a little lift into the stock futures today. The problem, of course, is that someday those interest rates will go higher, assuming that someday, we get some worldwide economic growth.
Job cut announcements in the U.S. grew by 19 percent in June over the May announcements according to the Challenger Survey. 45,000 layoffs were announced in June, with over a third of them coming in the energy industry.
Teva Pharmaceuticals and Viacom both announced better than expected earnings this morning. And Nike is getting out of the golf equipment business, this at the same time that Adidas is putting its golf equipment business up for sale.
The interest rate cut in Great Britain has the FSTE Index higher by about a point and a half. Mainland Europe is about one percent higher.
At this point, adjusted for fair value, the S&P 500 futures are higher by 4 points, the Dow futures are up 41, and the NASDAQ futures are 5 points above fair value.
We’ll get a full slate of economic reports this week, along with another 100 of the S&P 500 telling us about their quarterly earnings.
A couple of readings on July manufacturing come this morning with the PMI and the ISM reports. Little change is expected from the June numbers.
Tesla and Solar City announced agreement on their anticipated merger this morning, in an all-stock deal. And Uber is evidently throwing in the towel in China, selling out to rival company Didi. That’s a 35 billion dollar deal. Verizon is on the acquisition warpath again, buying Fleetmatics for 2.4 billion in cash.
There’s another smaller, but perhaps more interesting deal announced this morning. GlaxoSmithKline and Alphabet are forming a 700 million dollar Bio-electronic company to develop electronic medical products. These will be tiny electrical devices that can be implanted in the body to stimulate or block the body’s natural electrical signals.
August has the reputation of being not particularly friendly for stock prices. In fact, last August was the worst month for stock prices since 2010, and included the famous “flash crash.” But apparently there’s no trouble on the way in the early going today.
Our stock futures were significantly higher overnight, then lost almost all of that altitude, and have since bounced a little higher. At this point, adjusted for fair value, the S&P 500 futures are higher by 3½ points, the Dow futures are up 38, and the NASDAQ futures are almost 10 points above fair value.